The Development of Business in the Lenzing Group

The expected recovery in markets relevant for Lenzing has failed to materialize to date. The continued increase in raw material and energy costs on the one hand and very subdued demand on the other had a negative impact on the Lenzing Group’s business trends in 2023, as well as on the overall sector.

As early as the end of 2022, Lenzing successfully implemented a reorganization and cost reduction program with a volume in excess of EUR 70 mn. At the same time, the balance sheet and liquidity positions were significantly strengthened through the successful capital increase in a volume of around EUR 400 mn and the extension of debt terms in a volume of around EUR 250 mn in the reporting year.

Building on this, the Managing Board is currently implementing a comprehensive performance program with the overriding objective of achieving significantly enhanced long-term resilience to crises and greater agility in the face of market changes. The program initiatives are aimed primarily at an improvement in EBITDA and free cash flow generation through stronger revenue and margin growth, and sustainable cost excellence. In addition to the significantly positive revenue effects, the Managing Board expects annual cost savings of more than EUR 100 mn, of which around 50 percent will be effective from the current financial year onwards.

Revenue in 2023 decreased by 1.7 percent year-on-year to EUR 2.52 bn. This reduction was primarily due to lower fiber revenues, while pulp revenues were up.

The operating earnings trend was mainly influenced by the market environment. Earnings before interest, tax, depreciation and amortization (EBITDA) rose by 25.4 percent year-on-year to EUR 303.3 mn in the reporting year. The EBITDA margin increased from 9.4 percent to 12 percent.

The operating result (EBIT) amounted to minus EUR 476.4 mn (compared with EUR 16.5 mn in 2022) due to EUR 464.9 mn of impairment losses, and the EBIT margin stood at minus 18.9 percent (compared with 0.6 percent in 2022). Accordingly, the result before tax (EBT) amounted to minus EUR 585.6 mn (compared with minus EUR 10.1 mn in 2022).

The recognition of impairment losses arises from the ongoing uncertainties in the economic environment, continued higher raw material and energy costs, as well as higher discount rates due to the change in the interest rate environment. The impairment losses were not cash-effective, but had an impact on EBIT and EBT in 2023.

The income tax expense of EUR 7.3 mn (compared to EUR 27.2 mn in 2022) mainly reflects the impairment of tax assets of individual Group companies and currency effects due to the translation of tax items from local to functional currency.

Cash flow from operating activities amounted to EUR 160.3 mn in 2023 (compared with minus EUR 43.2 mn in 2022). Free cash flow amounted to minus EUR 122.8 mn, primarily due to the trend in results as well as the completion of strategic investment projects. However, this level of free cash flow was already significantly higher than the previous year’s level of minus EUR 740.7 mn, largely due to the implementation on schedule of the performance program.

In the third and fourth quarters of 2023, Lenzing generated positive free cash flow of EUR 27.3 mn and EUR 15.4 mn respectively (compared with minus EUR 132.3 mn in the first quarter and minus EUR 33.1 mn in the second quarter of 2023), thereby confirming that the measures to strengthen free cash flow are working.

Capital expenditures for intangible assets, property, plant and equipment, and biological assets (CAPEX) amounted to EUR 283.6 mn in the reporting year (down from EUR 698.9 mn in 2022) including due to the investment projects in China and Indonesia. Compared to December 31, 2022, the liquidity position increased by 61.3 percent to EUR 731 mn as of December 31, 2023, due to the capital increase.

Total assets decreased by 5.6 percent compared with December 31, 2022, to EUR 5.21 bn as of December 31, 2023. Adjusted equity decreased by 13.4 percent to EUR 1.81 bn. The adjusted equity ratio stood at 34.7 percent as at December 31, 2023 (compared with 37.8 percent as at December 31, 2022). Net financial debt amounted to EUR 1.56 bn as of the balance sheet date (compared with EUR 1.8 bn as of December 31, 2022).1 Net gearing increased to 86.4 percent (compared with 86.2 percent as of December 31, 2022).1 Trading working capital reduced by 3.4 percent to EUR 551.1 mn, mainly reflecting a decrease in inventories of EUR 159.6 mn as a result of accelerated inventory reduction and an offsetting negative effect from the significantly lower level of trade payables compared to December 31, 2022.

The details of the revenue and earnings trends in the year under review are as follows:

Condensed consolidated income statement1
EUR mn















Cost of sales




20.1 %

Gross profit










Other operating income




48.6 %

Selling expenses





Administrative expenses




5.5 %

Research and development expenses




136.4 %

Other operating expenses




200.5 %











Financial result




311.9 %





5,722.0 %






Income tax expense





Net profit/loss after tax




1,492.2 %


The complete consolidated income statement is presented in the consolidated financial statements.

1 Since the second quarter of the 2023 financial year, net financial debt is presented excluding lease liabilities (see the supplement to the management report “Notes on the Financial Performance Indicators of the Lenzing Group”).

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